Question: identify and explain two Issue of the case study above (word count 500 words)

ENTER THE WORLD OF BUSINESS utive officer officer (CEO) Starbucks: Refocusing on Starbucks continues to offers comprehensive health benefits that exceed those provided the Brew Using HR Practices by other retailers. Although 85 percent of its employees are part-time, they are still eligible for Starbucks, the Seattle-based coffee store, has full-time benefits if they work 240 hours a quar experienced incredible growth in the past several ter. Less than 30 percent of part-time workers in years by opening more than four stores and add- the United States receive health care, paid sick ing 200 employees each day. However, Starbucks leave, or eligibility for bonuses or stock options has had to change its strategy and reposition its Starbucks provides all employees and their brand to cope with the recession that has caused same-sex or opposite sex partners comprehen- consumers to save more and spend less. Because sive health benefits that include medical, dental, of its growth goals, the company made poor and vision care as well as tuition reimbursement, selection for new stores, cluttered the stores with stock options, vacation, and the 401(k) retire- merchandise, and lost its focus on coffee. Howard ment plan Schultz, who returned to the Starbucks chief exec- To cope with the economic conditions, Star- position in 2008, has supported bucks' best customers are saving money by refocusing the company on coffee by ordering making fewer visits to Starbucks each month. To phaseout of breakfast sandwiches and cutting ensure that customers are delighted and coffee the number of new store openings. The company served meets high-quality standards, Starbucks has had to change its human resource policies went so far as to shut down operations of most of its stores in February 2008 for three and a half while still mize certain practices more than others still trying to preserve its value-and-treat- hours for a full-day training event. Training is inte- . employees-right approach that is part of the com gral for Starbucks to successfully compete in in the pany culture. One of the company's six weak economy in which customers are spending principles is "to provide a great work environment less . The training event, known as "Perfect the and treat each other with respect and dignity Art of Expresso," was designed to help baris- Starbucks has taken several drastic steps ir high-quality expresso. One activity its human resource practices to ensure that it consisted of f pulling an expresso shot and then can survive the sharp decline in its sales. CEO evaluating the process and the product Was it ward Schultz and other top executives did not the right color? Did it take too or too short earn bonuses in 2008 as a result of the company's a time?). Staff discussions about how the training aume: ons doute poor financial performance. Schultz asked the would benefit customers were held at each store. board of directors to reduce his $1.2 million in Employees were told to greet regular customers base pay to $1. The compensation committee by their first name and to not resteam milk that agreed to cut his pay to less than $4 per month had been steamed once. To counter percep- in salary, although he will still receive his stock tions that Starbucks is the home of the $4 cup compensation. The committee put the company's of coffee, the company is training baristas to tell new corporate jet up for sale. Starbucks has had customers that the average price of a Starbucks to close 300 underperforming stores and layoff beverage is less than $3 and 90 percent of Star- 6,700 employees. Starbucks also announced that bucks drinks cost less than 54. Baristas are also it would no longer match employees' contribu- encouraged to promote to customers its new dis- tions to their 401(k) retirement plans. However, counted paring of coffee and breakfast for $3.95 * guiding tas deliver Howard aboo long 4 CHAPTER 1 Human Resource Management: Gaining a Competitive Advantage up saying, "Don't ask for permission, ask for forgiveness." Schultz believes that one of Starbucks' most serious problems is that its successes have left the company too cautious. Part of this is because he is seen as the soul of the company, which causes employees to consider "What will How- ard think?" before making decisions. He creates passion but also creates anxiety, Schultz is trying to change his image and at the same time make Starbucks more innovative. When one employee in a California store suggested that he could create better artwork than what was hanging on the walls, Schultz told him to put his pictures Source Based on Weber "Preserving the Counter Culture Work force Management. February 2005, pp 28-34, 1. Adomy. Schultes Second Act Jolts Starbucks, Wall Street Journal, May 19, 2008, pp. AL A11 M Weinstein, Fresh Cup of Training Training, May 2008.10 Adamy Starbucks Plays Common Joe The Wall Street Journal February 2009. p. 32, J. Adamy. "Starbucks CEO, Top Official Didn' Get Bonuses for 2003." The Wall Street Journal, January 23, 2009, 33 Adamy Starbucks Could Cut 4100 Match. The Wall Street Journal December 24, 2008, B3. J. Adamy, "At Starbucks, Tail Order for New Cuts, Store Closures. The Wall Street Journal, January 29, 2009, op 82.B) Adamy, Starbucks Shift Focus to Value Cost Cutting Wall Street Journal, December 5, 2008. B1